Ethereum’s NVT Signal Screams Undervalued at $4,700 - Here’s Why
Ethereum's network value sits at a staggering discount according to key on-chain metrics—while traditional finance still scratches its head about 'digital gold.'
The NVT Ratio Breakdown
Network Value to Transaction (NVT) data flashes bullish as Ethereum processes record transaction volumes at its current $4,700 price point. The metric—often called crypto's PE ratio—signals strength when network usage outpaces market cap growth.
Market Momentum vs. Fundamentals
Traders chase shiny new tokens while Ethereum's infrastructure handles more real economic activity than entire small countries. The network settles billions daily—yet remains priced like a tech stock instead of the global settlement layer it's becoming.
Institutional Blind Spots
Wall Street analysts still value blockchain networks using Excel models designed for soda companies—missing the fundamental shift toward programmable money. Meanwhile, smart money accumulates ETH during every dip.
The $4,700 price tag looks like a steal before the next wave of institutional adoption hits. Maybe traditional finance will finally understand decentralized networks—right after they finish downgrading Tesla for missing quarterly delivery targets by 0.5%.
Ethereum’s NVT Ratio Hits New Record Low
In a Quicktake post on the CryptoQuant platform, crypto analyst CryptoOnchain reported that there has been a disproportionate increase in transaction volume concerning ETH compared to its market capitalization.
The relevant indicator here is the ethereum NVT (Network Value to Transactions ratio) (30-day SMA), which measures the ratio of Ethereum’s market capitalization to its daily transaction volume over the span of 30 days.
CryptoOnchain revealed that the 30-day moving average NVT recently hit its lowest point ever recorded. As explained by the on-chain analyst, this could suggest two things: firstly, that the Ethereum token is undervalued.
For context, a low NVT reflects very high transaction volume compared to a relatively low market capitalization. What this means is that the Ethereum network is being heavily used, but the price isn’t showing its worth as much as its usage suggests. Following this logic, one could conclude the market is currently undervaluing Ethereum’s utility.
The second indication from the historically low NVT is that the increase in transaction volume could be due to “temporary factors such as DeFi, NFT events, or large capital movements.” According to the analyst, these temporary factors do not necessarily mean sustainable growth for the ETH price.
What To Expect
CryptoOnchain cited historical occurrences to explain the typical case where an NVT bottom is a result of market undervaluation. In this case, it has been observed that sharp NVT bottoms precede bullish phases.
However, in what was a caveat, the online pundit mentioned that there have been cases where very low NVT levels were accompanied by further price declines.
Seeing that the Ethereum NVT is not just at a mere low level, but at its all-time low, it seems more likely that the market is undervaluing the token’s worth. It is therefore not out of the question to expect a more upward swing in the price of the cryptocurrency.
Related Reading: Ethereum To $6,800 By Year End? CME Futures Data Shows Record Institutional Demand
Nevertheless, with the possibility that a bullish phase might not necessarily follow in mind, investors might want to tread cautiously. As of this writing, the Ethereum token is valued at approximately $4,670, reflecting an over 4% price increase in the past 24 hours.
